Illegal Enterprise Research Articles

Risk management in the shadow economy: Evidence from the sport betting market

I use the market for college football point spread gambling as a laboratory for assessing risk management activity among illegal firms. Offshore bookmakers employ pricing policies that reflect a book balancing objective whereas legal bookmakers seldom do so. Pricing policies that prioritize book balance lower the variance of bookmakers’ expected cash flow, but at the cost of lower profit. Due to the legal and moral hazards involved in operating an illegal enterprise, these firms rely on internal financing. Consequently, illegal bookmakers behave as mean–variance optimizers as opposed to legal bookmakers who appear to behave as profit maximizers.

August Vollmer, Traffic in Women, and the Theory of Organized Crime

During the 1920s, the League of Nations carried out the first intercontinental investigation into the traffic in women. Although this work is virtually unknown in criminology, the investigators, William Snow and Bascom Johnson, formulated the conceptual language of “trafficking” used today. It was also during the 1920s that Frederick Thrasher and John Landesco published their pioneering works on “organized crime” drawing on research in Chicago. The advantages of the League’s model can be seen in the response to a 1924 report of a white slave traffic ring in Los Angeles by August Vollmer, the celebrated founder of professionalism in American policing. Vollmer’s language of a white slave traffic ring in Los Angeles recalls a nineteenth-century understanding of traffic in women but previews the illegal enterprise model that emerges from the industrial city. Drawing on their understanding of crime in port cities, Snow and Johnson situate the traffic in women within a social networks model. Vollmer looked for the spider, Snow and Johnson looked at the web.

Comprehensive methods for investigating crimes in the illegal trafficking of precious metals and stones

The objective of the article was to develop theoretical provisions for structuring comprehensive methods of crime investigation and to form, on their basis, effective recommendations for the dissemination and investigation of crimes committed in the field of trafficking in precious metals and stones. The authors present comprehensive methods for investigating crimes in the field of illegal circulation of precious metals and stones. An archival 300 criminal cases were examined, the preliminary investigation of which occurred between 2015 and 2019, and in addition, an online interview was conducted with 220 law enforcement officers fighting such crimes. As a result, comprehensive methods have been developed to investigate these crimes, as well as a system of provisions and scientific recommendations for the dissemination and investigation of thefts, trafficking, violations of the rules for the delivery of precious objects. He was interested in designing a method for declaring, illegal enterprise combined into a single subject of investigation with due attention to criminal and forensic prerequisites, including the following structural elements: a) comprehensive forensic characteristics of such crimes, and b) activities of dissemination and investigation of such crimes using the situational approach in its various stages.

К вопросу о составе преступления, сопряженного с незаконным предпринимательством (ст. 171 УК РФ) в свете теории криминализации и декриминализации

The research is focused on the fact that illegal enterprise is characteristic of the whole world. At the same time, the informal sector of the economy accounts for 10 to 20 % of gross domestic product in developed coun-tries and about 60 % in emerging economies. We indicate that the Criminal Code of the Russian Federation re-flects responsibility for illegal enterprise in Article 171. We emphasize that there is a discussion at the doctrinal level about the expediency of having this corpus delicti. The purpose of the study: to analyze the (un)foundedness of the criminalization of corpus delicti associated with illegal business (Article 171 of the Crim-inal Code of the Russian Federation). Tasks: to analyze the social danger of an act related to illegal enterprise; characterize the relative prevalence of this act; to study the historical continuity of the reflection of this corpus delicti in the criminal law of Russia; conduct an analysis of foreign legislation to reflect such a corpus delicti. As a result, we analyze the social danger of this crime, as well as its compliance with the principles of criminaliza-tion, such as the relative prevalence of the act, compliance with historical succession and modern foreign expe-rience.

Government Supervision on Explosive Enterprises’ Immoral Behaviors in E-Commerce Enterprises: An Evolutionary Game Analysis

Explosive enterprises’ immoral behaviors in the online shopping market are widespread and have not been effectively solved. Especially in developing countries, there is a direct relationship between massive immoral behaviors and the inefficiency of government supervision. Using an evolutionary game, this paper finds that immoral behavior is more likely to spread in online markets than in traditional markets. Only when government supervision and punishment are large enough and government’s punishment for the illegal enterprise exceeds extra supervision costs that government pays, explosive immoral behaviors can be curbed. Additionally, consumer support is an essential factor in improving the efficiency of government supervision. This study sorts out the interactions between e-commerce market participants and the government, obtains a path to achieve efficient government regulation, and offers management insights. The findings can serve as a reference for ensuring order in the emerging online shopping market and can also provide theoretical references for future related research.

The “horse-meat” scandal: illegal activity in the food supply chain

PurposeFood supply chain theory and practice generally assumes that the business practices and processes involved are ethical, legal and value-adding when this is not always so, as demonstrated by the ongoing 2013 horse-meat scandal. Although it is ostensibly a UK-based affair, it encompasses the meat processing industry across Europe. This study, thus, aims to examine supply chain criminality and to highlight “scandal scripts” which amplify underlying issues.Design/methodology/approachA systematic review of extant literature on the scandal adds to that body of work, updating the existing narrative to include a detailed analysis of convicted “industry insiders”, highlighting supply chain issues involved in the frauds. Micro-stories of businessmen involved are presented to enable an empirical exploration of their illegal involvement in the meat trade. Using storied data from accounts of the scandal as contemporary examples, emerging themes and issues are outlined through a mixed methods qualitative approach consisting of ethical covert research, using documentary research strategy underpinned by narrative inquiry.FindingsMedia coverage perpetuated various myths notably that the fraud was carried out by “shadowy”, Eastern European “mafia figures” exploiting the extended food supply chains. The analysis is aided by the use of media hypothesis. Far from being a mafia-inspired fraud, the criminal activity was organised in nature and committed by insider businessmen. The findings demonstrate that supply chains are complex and require an understanding of storied business practices, including the ethical and illegal.Research limitations/implicationsFrom an academic perspective, there are implications such as the dearth of academic research and policy-related studies into food fraud possibly because of the difficulty in obtaining data because of access to such enterprises and entrepreneurs necessitating reliance upon documentary sources and investigative journalism.Practical implicationsThere are distinct policy implications, particularly the need to legislate against international criminal conspiracies and everyday ordinary organised food frauds perpetuated. Lax penalties do little to prevent such crimes which need to be taken more seriously by the authorities, and treated as major crime. In formulating food laws, rules and regulations, greater cognisance should be taken to consider how supply chains in the food industry could be better protected from predatory criminal actions.Originality/valueThis novel qualitative study will enable academics and practitioners to better understand illegal enterprise, food fraud and risk management from both operational and supply chain perspectives and will be useful to investigators by furthering our understanding of entrepreneurial practice and morality in the food industry.

Why has the ‘black’ market in the Gulf of Guinea endured?

ABSTRACT This study seeks to investigate the resilience of energy black market in the Gulf of Guinea. The objective of the study is carried out in a theoretical elucidation grounded in qualitative empirical research. The study argues that the regional ‘black’ market of the trivet of crude oil theft, petro-piracy and illegal trade in fuel is an organised business crime; a well-structured illegal enterprise which thrives on inadequate energy infrastructure and corruption in the region. The key ingredients, processes and institutions of the ‘black’ economy are constructed within socio-economic networks, exist in an overlap, and operate in a constantly mutating crime environment. The study concludes that business–network–environment nexus of crime provides a justifiable explanation for the elasticity of the crude economy in the Gulf of Guinea, with the enterprise’s socio-economic infrastructure enhancing its susceptibility as much as it reinforces its resilience and should be the fulcrum of targeted measures.

A Quantitative Application of Enterprise and Social Embeddedness Theories to the Transnational Trafficking of Cocaine in Europe

ABSTRACT Illegal enterprise and social embeddedness theories have highlighted the importance of market forces and social factors, respectively, for analyzing organized crime and organized criminal activities. This paper empirically demonstrates the joint explanatory power of these respective theories in the case of the transnational trafficking of cocaine. It does so by conceptualizing transnational cocaine trafficking as a network of relationships among countries; a network whose structure reflects the actions of manifold organized criminal groups. The analysis utilizes exponential random graph models to analyze quantitative data on cocaine trafficking which are ordinarily difficult to capture in empirical research. The analysis presented focuses on a set of 36 European countries. The results yield insights into the nature of the relationship among economic incentives, social ties, geographic features and corruption, and how, in turn, this relationship influences the structure of the transnational cocaine network and the modi operandi of cocaine traffickers.

The Pavlenko Construction Enterprise. Large-scale Private Entrepreneurialism in Stalin’s USSR

This essay reviews the characteristic features of the Soviet ‘shadow economy’ by examining the activities of a major construction enterprise headed by N. M. Pavlenko from 1948 to 1952. This was the largest currently known private illegal enterprise of the Stalinist period. Pavlenko’s organisation built dozens of roads and railways under contract to state entities. Based on newly accessible archival documents, the methods of Pavlenko’s organisational activity and the reasons for its lengthy existence are considered. The author argues that, regardless of its extraordinary scale, Pavlenko’s enterprise was in fact typical of the Stalinist ‘shadow economy’, and that future archival research would probably reveal that this shadow economy was far more significant than has been understood to date.

The trader perspective: researching extortion in Palermo

This article presents the results of some empirical research on extortion in Palermo. The project is based on the administration of a structured questionnaire with traders in various districts within Palermo and villages in the provincial interior, in two phases, the first in 2007 and second in 2012. The objective was to explore traders’ opinions on the various aspects of the phenomenon of extortion: its characteristics, causes, possible solutions, and the responsibilities of every actor in the battle against this illegal enterprise. In the period in which the research was undertaken, there was a wave of strong anti-mafia and anti-racketeering activism, particularly stimulated by the emergence in 2004 of the Comitato Addiopizzo and culminating in the establishment of the first ‘antiracket’ association in Palermo.

Illegal diversification strategies in the farming community from a UK perspective

Illegal diversification strategies in farming contexts are neglected in research terms. There are endogenous and exogenous factors that influence the potential strategic capability and activity of illegal entrepreneurs and criminal farmers. Internal factors include the personal characteristics of the farmer–qualities and skills. External factors, outside the control of the individual illegal entrepreneur, include the activities and processes undertaken by them, the characteristics of the illegal enterprise, government policies, markets and environmental factors. Using a documentary research methodology of 210 case studies, located on the internet, from across the UK (where farmers had been charged with criminal offences relating to their occupation), the article contributes to the literature on farm diversification and rural crime.

Illegal activity in the UK halal (sheep) supply chain: Towards greater understanding

Food supply chain theory and practice assumes that the processes involved are legal and value adding. In this paper, using examples from the UK halal (sheep) meat supply chain, we outline a value extracting value chain through a mixed methods qualitative approach consisting of face-to-face-interviews and a documentary research strategy underpinned by Narrative Inquiry. Building on previous theoretical work on Illegal Rural Enterprise, we present a narrative of an individual rogue-farmer, and explore his involvement in the illegal halal (‘smokies’) trade over a fifteen-year period. The paper provides a compelling story that will enable investigators to better understand illegal enterprise from a supply chain perspective and more adequately address the concerns stated in the UK Fraud Act 2006. The paper will be useful to food standards agencies in that furthers our understanding of entrepreneurial practice and morality in the food industry. The results demonstrate that illegal rural enterprise is a multi-faceted concept that requires an understanding of business practices and processes alongside a multi-agency approach to enterprise orientated crime. Our approach suggests that supply chains can be ‘flipped’ in order to understand illegal processes in addition to conventional legal processes.

From Community Cancer to Common Entertainment: The Dynamics of Lottery Legalization in Massachusetts

To theorize the process by which behaviors once regarded as deviant become normalized, this article analyzes the legalization of a state‐run lottery in the American state of Massachusetts. Lotteries are an important case to study the dynamism of socially constructed problems as well as the creation of gaming markets because they raise moral, social, and economic concerns associated with all types of gaming with the added dimension of having the state government serving as regulator and proprietor of the wagering. Drawing on newspaper articles and archival records, this article examines mobilization around failed efforts to establish a lottery in Massachusetts in the 1930s and 1950s, followed by the successful legalization of a lottery in the 1970s. Highlighting meaning making collective struggles over the lottery in variable circumstances illuminates the processes by which the perceptions of proprietors of operations, patrons of the games, and the distribution of proceeds shift, ultimately turning what was once an illegal enterprise into a socially accepted state institution.

Mark H. Haller, Matthew Yeager. Illegal Enterprise: the work of historian Mark Haller. Lanham, MD: University press of America, 2013. 298p

Mark H. Haller, Matthew Yeager. Illegal Enterprise: the work of historian Mark Haller. Lanham, MD: University press of America, 2013. 298p

From bush to butchery: cattle rustling as an entrepreneurial process in Kenya

Purpose– The purpose of this paper is to provide an analysis of the changing practices of cattle rustling in Kenya from a relatively small isolated and opportunistic activity to a much more planned and systematic entrepreneurial business involving collusion and corruption.Design/methodology/approach– This paper provides a conceptual approach using key literature and documentary evidence to show how, in the northern part of Kenya, cattle rustling is common occurrence with criminals taking advantage of remote rural environments with minimal surveillance and consequently less opportunity of being stopped and searched by police.Findings– Results evidence significant differences in how rustling is perceived and valorized. Rustling in Kenya is now an entrepreneurial crime with the involvement of rural organized criminal gangs (ROCGs), who are operating in food supply chains throughout Kenya and the African continent.Practical/implications– This paper suggests that a more nuanced understanding of the entrepreneurial nature of some illegal practices in a rural Kenya is necessary and how it requires multi-agency investigation.Originality/value– The paper is unique in that it considers how cattle rustling is becoming a more entrepreneurial crime than previously. Little prior work on this subject exists in Kenya. The paper utilizes the framework of Smith and McElwee (2013) on illegal enterprise to frame cattle rustling as an entrepreneurial crime.

Design of USIM-based secure user authentication scheme in a mobile office environment

In order to spread the scale of the mobile device market rapidly, mobile office applications have been introduced that can be process office work anytime, anywhere. However, the mobile office is vulnerable to several security threats that can occur over wireless networks, which can result in illegal enterprise information access and disclosure because of the openness and portability of the mobile device. Therefore, the mobile office environment must prevent unauthorized service and resource access, and a user authentication scheme is needed to mitigate the potential security vulnerabilities. In this paper, we propose a USIM-based secure user authentication scheme for a mobile office environment. The proposed scheme uses the USIM to securely share secret information for authentication between the mobile user and the server, and the mobile device can perform re-authentication to the server through the re-authentication phase in the event of handover. Moreover, the proposed authentication scheme is specified using Casper and is verified the security using the CasperFDR and FDR tool.

The dark side of the rural idyll: Stories of illegal/illicit economic activity in the UK countryside

In rural sociology and rural studies, rurality in many countries is commonly constructed as an idyllic space in which crime is perceived as an urban problem. In other countries, however, rurality is constructed as a place where the individual is vulnerable and the population is socially beyond the urban. This article questions the construction of rurality as idyllic by reporting on research in rural areas which demonstrates that crime, in particular illicit and illegal enterprise based crime, is becoming more prevalent in the UK countryside. In urban areas, illicit and illegal forms of entrepreneurship are distinctive in terms of how they are construed and enacted – so why would it not be similar in rural areas? The paper presents a theoretical framework based on the work of Ferdinand Tönnies which demonstrates that contemporary examples of roguery exist in the UK countryside. We make more visible what previously was invisible, or ignored in the literature. Five stories of illegal rural enterprise are presented which provide a counterargument to Mingay's rural idyll. Since illicit and/or illegal rural enterprise is under-researched this constitutes an original attempt to frame an emerging phenomenon of interest.

Jewish tradition faces the Soviet economy: moral dilemma of ‘shadow’ entrepreneurship in the former Pale of Settlement, Ukraine

Soviet life in the former Pale of Settlement appears in the memories of its residents as a world of living Jewish tradition existing within the professional and business activities of artisans and merchants at a time when the ideology and political structure of the Soviet Union prohibited private enterprise. That is why it occupied the shady parts of the socialist economy. Today, after collapse of the Soviet Union, it still poses moral dilemmas for those associated with its illegal activities. However, recollections about Soviet illegal enterprise also provide a space for critique of the Soviet system and a base for construction of contemporary local identity; in this way people reconcile the economic ethics of the recent Soviet past with modern capitalist reality. Narratives about illegal economic activities in the Soviet period are about the relationship between the people and the state. They are seen as a cosmological system; the Soviet state acted as an economically ineffective external force. Within its matrix was integrated a local world of human relationships with their customs and rules created the own local world of consumption and welfare. At the centre of this space is the socially and economically experienced Jewish entrepreneur whose competence is based on local Jewish tradition. Stories about illegal Soviet economic activity have become the heritage of local communities that approve of local business continuity.

The embeddedness of illegal entrepreneurship in a closed ethnic community

There is an emerging body of literature which attempts to differentiate between the conceptual and theoretical aspects of legal and illegal, amoral and immoral entrepreneurial practice. Legal and illegal entrepreneurship are regarded as separate spheres of study but little is written which considers the actual consequences to individuals, communities and places which arise from such enterprise. In this invited paper, we examine a powerful case of embedded illegal enterprise in a closed ethnic community, exposed through a fatal explosion in an illegal alcohol still in Boston, Lincolnshire, UK. Boston in Lincoln, or ‘Bostongraad’ as we ironically relabel it here. This study combines a literature review on illegal entrepreneurship with observations based on documentary research methodology. A typology of enterprise orientated crime committed is provided. This paper demonstrates the embeddedness of illegal entrepreneurial activity and outlines a typological schema for differentiating between the informal economy, illicit and enterprise, illegal enterprise and criminal entrepreneurship

Underground banks in NYC, their main clientele and operators: The perspective of Chinese illegal immigrants

The financial link of the process of illegal immigration is an unexplored area in previous studies. This current work is the first qualitative study to deal with this concern. The study examines the nature of Chinese-operated informal fund transfer systems in the U.S. by investigating the main clientele, operators or owners, location, and operation style of Chinese underground banks. The primary source of data came from in-depth interviews with thirty illegal immigrants in New York City and Philadelphia. The findings show that the emergence of underground banks in the U.S. coincided with the largest tide waves of Abstract: The financial link of the process of illegal immigration is an unexplored area in previous studies. This current work is the first qualitative study to deal with this concern. The study examines the nature of Chinese-operated informal fund transfer systems in the U.S. by investigating the main clientele, operators or owners, location, and operation style of Chinese underground banks. The primary source of data came from in-depth interviews with thirty illegal immigrants in New York City and Philadelphia. The findings show that the emergence of underground banks in the U.S. coincided with the largest tide waves of Chinese illegal immigrants smuggled into the U.S. They served as a preferred means of fund transfers among Chinese illegals due to the unique service they offered, not necessarily because of the clients' illegal status, or coercive means by smuggling groups. The evidence generated from this research provides support for the illegal enterprise perspective. Chinese illegal immigrants smuggled into the U.S. They served as a preferred means of fund transfers among Chinese illegals due to the unique service they offered, not necessarily because of the clients' illegal status, or coercive means by smuggling groups. The evidence generated from this research provides support for the illegal enterprise perspective.